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If a manager follows the recommendations made by this theory, then they will have implemented a proper global supply chain that focuses on human collaboration which in turn will yield better results. Governments can play a large role in regulating certain aspects of a global supply chains.
Governments have a wide range of policy instruments that they can use to implement regulations. These instruments include but are not limited to: taxation, financial incentives, regulation, liberalization, infrastructure, land use planning, and advice and exhortation. However, before designing and implementing a regulation, it is important for governments to properly analyze any second-order effects that might occur.
Second order effects are defined as the offsetting effects that happen elsewhere because of the implementation of a policy. Recently, there has been a steady incline of governments creating and implementing regulations to promote green supply chains. The first is reducing freight transport intensity as it is becoming necessary for governments to introduce explicit policies to encourage companies to reduce the amount of freight movement within their system.
The second aspect is freight modal split, which the author describes as shifting freight to greener transport modes. Governments can promote this by using policy instruments usually taxation, financial incentives, regulation, and infrastructural measures. The third aspect is vehicle use which governments must attempt to promote companies to improve their use of road freight. This can be done through taxation, regulation, liberalization, and advice committees. The fourth aspect is increasing energy efficiency which often is seen with the introduction of general efficiency programs.
Governments can raise fuel duty, subsidize driver training schemes, reduce and enforce speed limits, impose fuel economy standards, incentivize scrappage of old vehicles and give advice to promote a higher standard of energy efficiency. The fifth and final aspect is cutting emissions relative to energy use which needs to be addressed through a policy. The United Nations plays a big role in designing and implementing international regulations that have huge impacts on the operation and management of global supply chains.
The United Nations created the UN Global Compact which is an organization that aims to mobilize a global movement of sustainable companies and stakeholders. The UN Global Compact attempts to mobilize a global movement by supporting companies to be responsible and to advance societal goals. The ten principles fall under the broader categories of human rights, labour, environment, and anti-corruption. With regards to human rights the organization encourages businesses to support and respect human rights, and make sure they are not abusing any established human rights laws.
The labour principles deal with the recognition of collective bargaining, elimination of forced labour, abolition of child labour, and elimination of discrimination. The environment principles focus on being cautious to environmental challenges, promoting greater environmental responsibility, and encouraging the development of environmentally friendly technologies. The anti-corruption principle states that businesses should work against corruption.
They have published two guides which illustrate how businesses can implement the ten principles throughout their supply chains and integrate sustainability.
These guides state that companies can achieve supply-chain sustainability by taking certain steps which include: committing, defining, implementing, assessing, measuring, and communicating to effectively become sustainable. Supply-side risk is a category that includes risks accompanied by the availability of raw materials which effects the ability of the company to satisfy customer demands.
Common supply side risks are often the fact that it takes a long time to receive products from around the world, and suppliers may not necessarily operate to the same quality standards.
Outsourcing suppliers may provide a business several benefits but a lot of risk comes attached to it. One major risk is the fact that global currencies are constantly changing, a small change in foreign currency could have a large impact on the overall profit a business receives.
Supplier order processing time variability is another supply-side risk that comes increasingly risky when outsourcing suppliers. This risk is defined by the fact that the time it takes a supplier to fulfill an order can change for every order. Businesses are not exactly sure how the supplier is going to deal with the order and whether they will be able to deliver products on time.
Demand-side risk is a category that includes risks that pertain to the availability of the finished product. This can happen when customer demand is higher than supply, and the company does not have enough stock to appropriately deal with the customer demand. Since customer demand changes so frequently it is tough for managers to forecast what is needed for the next month which creates the risk of running out of stock.
As a by-product of these activities, scarce energy is depleted. Credit points:. Trase is an independent, research-based supply chain transparency initiative that seeks to transform understanding of the sustainability of forest risk supply chains. Globalization is one of those politically charged words that often implies more than it actually means. Instead of brand versus brand or company versus company, it is increasingly suppliers-brand-company versus suppliers-brand-company. Some might suggest, in fact, that globalization is a fait accompli.
From Wikipedia, the free encyclopedia. This article has multiple issues. Please help improve it or discuss these issues on the talk page. Learn how and when to remove these template messages. For example, during a massive East Coast ice storm in January , 80, miles of electrical power lines fell resulting in no electricity for 3,, Montreal, Quebec residents.
Improve Quality of Life Foundation for Economic Growth — Societies with a highly developed supply chain infrastructure modern interstate highway system, vast railroad network, numerous modern ports and airports are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, the economy grows. In fact, the one thing that most poor nations have in common is no or a very poorly developed supply chain infrastructure.
Improves Standard of Living — Societies with a highly developed supply chain infrastructure modern interstate highway system, vast railroad network, numerous modern ports and airports are able to exchange many goods between businesses and consumers quickly and at low cost. As a result, consumers can afford to buy more products with their income thereby raising the standard of living in the society.
The high Chinese supply chain cost is a major impediment to improving the standard of living for Chinese citizens. Consequently, China has embarked on a massive effort to develop its infrastructure. Job Creation — Supply chain professionals design and operate all of the supply chains in a society and manage transportation, warehousing, inventory management, packaging and logistics information.
As a result, there are many jobs in the supply chain field. For example, in the U. This translates into 10,, U. Opportunity to Decrease Pollution — Supply chain activities require packaging and product transportation. As a by-product of these activities, some unwanted environmental pollutants such as cardboard waste and carbon dioxide fuel emissions are generated. CO2 emissions in As designers of the network, supply chain professionals are in a key position to develop more sustainable processes and methods.
Opportunity to Decrease Energy Use — Supply chain activities involve both human and product transportation. As a by-product of these activities, scarce energy is depleted. As designers of the network, supply chain professionals have the role of developing energy-efficient supply chains that use fewer resources.
Protect Cultural Freedom and Development Defending Human Freedom — Citizens of a country depend on military logistics to defend their way of life from those who seek to end it. Military logisticians strategically locate aircraft, ships, tanks, missiles and other weapons in positions that provide maximum security to soldiers and other citizens. Also, superior logistics performance yields military victory.
For example, the B-2 Stealth Bomber is able to deliver bombs to target without being detected by enemy radar. The Structure of Global Supply Chains provides a better understanding for the development of the right "footprint" of a global firm in its effort to supply its markets in environments of fast paced competition and tremendous uncertainty.
The authors focus on the structure of global supply chains and the detailed choices involving the network of facilities at all stages of the supply chain in order to successfully execute the global business strategy. The main purpose of The Structure of Global Supply Chains is to go beyond an elementary exposition of global supply chain network design issues using the latest research to identify the multiplicity of factors that contribute to designing these networks for competitive advantage of the global firm, while at the same time exposing both the successful features and the challenges faced by decision support systems developed to address such decisions.
The emphasis is on presenting approaches built on operations and supply chain modeling research and support tools based on academic and industrial research of the last two decades. The Structure of Global Supply Chains provides the reader with comprehensive answers to how should a global firm configure its network of facilities and what dynamic approaches to use to effectively reconfigure it in an effort to meet demand in global markets in a profit maximizing way of sustainable profitability and competitive advantage.